Thursday, June 13, 2013

Certification and accreditation programs ("certification" programs) sponsored by trade and professional associations are increasingly common. Whether it is the certification of individuals, products or services, the credentialing of professionals, or the accreditation of programs, services or institutions, these programs confer an array of valuable benefits not only to associations and association members, but also to industry, government, and the general public. However, standard-setting and certification programs are not without liability risk, sometimes potentially significant risks.

Fortunately, proper care in establishing and operating certification programs can go a long way toward minimizing those risks. As association certification programs continue to play an increasingly important role in our society, it is more critical than ever to ensure that associations are not deterred from sponsoring such programs as a result of legal risks that can be effectively managed. Court decisions involving association certification programs suggest that taking the following steps in establishing and administering certification programs will significantly limit the association's liability risks for such programs:

Certification standards should be clear and unambiguous, reasonable, fair, and objectively grounded – care should be taken to ensure that valid, objective bases support each certification standard. Standards should be based on data or on a respected body of industry or governmental opinion linking each particular standard to the qualities that the certification purports to measure. Where possible, standards should be directed at and focus on the ends, not the means. Where the means are specified, they must be legitimately, demonstrably and directly related to the objectives. Alternative means to achieve a given objective should be permitted where possible. Standards should never be arbitrary or capricious, or vague or ambiguous, and procedures should be developed that document the development and reasonableness of, and the objective basis for, proposed standards.

Certification standards should be no more stringent or rigid than necessary to ensure that minimum competency or quality levels have been attained.

Certification programs should be open both to association members and non-members on the same terms and conditions. Moreover, nothing in excess of a reasonable price should be charged to apply for or receive certification or recertification.

Specific commercial or economic considerations should play no role in the setting or application of the certification standards. In addition, certification programs should never be created or used for the purpose of raising, lowering or stabilizing prices or fees, excluding competitors from the market, or limiting the output or supply of products or services.

Prior to finalizing certification standards, provide interested parties with notice of the proposed standards and an opportunity to comment. Fairly and objectively consider such comments in finalizing the standards.

Where appropriate and feasible, consider utilizing and participating in the standard-setting procedures of the American National Standards Institute ("ANSI"), and, where a certification program is involved, consider obtaining accreditation of the certification program by ANSI.

Establish equivalent standards or alternative paths to certification wherever possible. As with the standards themselves, the determination as to whether the standards have been satisfied should focus on the ends, not the means. There must be valid, demonstrable and reasonable bases upon which to determine that applicants for certification have met the standards.

Periodically review and update all certification standards to ensure that they are current and reflect new legal, technological and other developments. Provide appropriate opportunities for public notice and comment whenever standards are modified, and carefully consider such comments in the revision process. In addition, document any and all complaints or concerns about the standards and revise the standards accordingly if appropriate.

Ensure that participation in and use of the certification program is completely voluntary.

Widely publicize the availability of the certification program and permit application by all who choose to apply. Do not limit participation in the certification program to only members of the sponsoring association. However, fees charged to non-members for certification may be higher than those charged to association members to reflect any membership dues or assessments that contribute to funding the program.

There must be no bias, partiality or inconsistency in establishing or operating the program. The certification process must be objectively and uniformly administered, without subjectivity, favoritism or discrimination. The rules of the certification process must be scrupulously, consistently and objectively followed by those administering the program.

Due process should be built into the program. Before certification is denied or revoked, those who seek the certification should be provided with: (i) notice of an adverse decision and a meaningful opportunity to respond to the notice, (ii) a hearing before a panel of peers, none of whom has a direct economic or personal interest in the outcome of the proceeding, (iii) the right to be represented by another person, including an attorney, and to submit evidence and arguments in defense, (iv) the right to examine the evidence and to cross-examine witnesses (if applicable), (v) the right to a written decision explaining the reasons underlying it, and (vi) the right to appeal an adverse decision to a higher-level decision-making body within the association. Proceedings of this nature should remain strictly confidential.

Require full disclosure by those involved in the certification process of any factor that might be considered bias or a conflict of interest. Require recusal or removal if a bias or conflict is particularly severe or pervasive. Full disclosure and appropriate checks and balances generally are effective mechanisms for safely managing most potential conflicts of interest. Generally, reduced volunteer involvement and increased association staff involvement may assist in objectivity and the absence of bias.

All certification decisions should be based completely and exclusively on the record of the review and not on extraneous, anecdotal, subjective, or other outside sources of information.

"Grandfathering" of those who do not meet all current certification standards generally should be avoided.

Require regular recertification as appropriate to ensure that those who are certified continue to meet the program's standards. In addition, review the certification process itself on a periodic basis to ensure it is being properly administered.

While nothing prevents a certification program from publicizing the names of, and information about, those who are certified, care should be taken to avoid any explicit or implicit disparagement of those who are not certified. Maintain strict confidentiality with respect to all adverse allegations, complaints, actions, and proceedings that arise in connection with the certification program. While it is acceptable for a certifying association to verify that an entity is not currently certified, no further details should be provided.

Ensure that all certification examinations – as well as all courses that prepare applicants for certification exams – are administered in strict compliance with the specific requirements imposed by the federal Americans with Disabilities Act and implementing regulations.

Maintain strict security regarding all aspects of the certification process. Any missing, stolen or copied examination booklets, for instance, can have a severe impact on the integrity of the certification process.

To minimize the risk of copyright infringement, maximize copyright rights, and facilitate enforcement of such rights, use a copyright notice on all certification program materials (e.g., standards, applications, brochures) and register such materials with the U.S. Copyright Office. Be sure that the association owns or has the right to use the entire contents of such materials. In addition, as listings of certified entities generally are not protectable under U.S. copyright laws, use a "shrinkwrap" license or other form of contractual commitment to place explicit, binding limits and conditions on the use of the list. The shrinkwrap license also can be a useful vehicle to disclaim any endorsement or guarantee of the certified entities by the association.

To minimize the risk of trademark infringement, maximize trademark rights, and facilitate enforcement of such rights, use a trademark notice in connection with the certification logo or seal and register the mark with the U.S. Patent & Trademark Office (either as a certification mark or as a service mark). Be sure the association's use of the mark does not infringe anyone else's trademark rights. In addition, codify the terms and conditions of, and limitations on, use of the mark by certified entities in a written agreement, possibly as part of the certification application form or in connection with distribution of the mark. Be sure to include provisions, among others, designed to prevent false or misleading use of the mark and to prohibit any further use upon decertification. Note that the federal Lanham Act, and similar state laws, prohibit the use of any false or misleading terms, names or symbols, or any other false or misleading descriptions or representations, that are likely to deceive the public with respect to the affiliation of the user with a particular organization.

Include binding limitation of liability and indemnification provisions in the certification application form (or other document) to absolve the association from liability to those who are certified, and to hold the association harmless from lawsuits by those injured by the acts or omissions of certified entities.

Avoid any implicit or explicit guarantee or warranty of certified products, services, individuals, or entities. To this end, avoid "puffery," do not overstate how a product, service or professional performs, and do not use superlatives such as "never fails" or "safest" in describing those that are certified.

Use written disclaimers where appropriate – such as on marketing materials, in the application form, and on the association's Web site – to clarify the association's limited role with respect to, lack of responsibility for, and absence of guarantees or warranties of, certified products, services or entities. If and where appropriate, require use of similar disclaimers by those that receive certification.

Maintain sufficient insurance to cover the liability risks of the certification program. Some association professional liability insurance ("APLI") policies provide coverage for certain claims arising from certification programs as part of the basic policy, although some with coverage sub-limits. Other APLI policies will not cover such programs without an endorsement to the policy. Importantly, APLI policies do not cover bodily injury or property damage claims arising from these programs. Stand-alone certification insurance policies are available and necessary to insure against these risks. Adequate insurance should be a prerequisite to the operation of any association certification program.

About Me

For health, education, workforce, finance and other non profit and public service organizations that want to leverage resources and strategically plan for U.S. or international market expansion.
Plexus Consulting Group® provides a broad-range of consulting and management services to not-for-profit and public service sectors. We help clients overcome challenge, achieve excellence, and maintain success.
The Plexus team of multilingual, multitalented professionals align themselves primarily among lines of industry specialization, including Globalization, Education, Workforce Development, Healthcare, and Financial Services.